When was the last time you had a business meeting with yourself? I know it sounds crazy, but I’m serious.
Businesses of all sizes hold meetings to make sure everyone knows the goals and stays on track to accomplish them. You need to do the same. If you have a spouse who is active in the business, he or she should be a part of the business planning, as well.
One goal that should always be near the top of your list is to improve profitability, to put more money in your pocket. I have owned a small fleet for 23 years and that is still one of my top goals. I’ve reached it many times because, as you’ll see, it’s a never-ending process.
If you don’t have a current profit and loss statement to work from, your first goal is to develop one. Get help if you need it. You can’t measure profitability if you don’t know your numbers.
For this business meeting, let’s work on fuel. There is always room for improvement and it usually has a fast return on investment (ROI), especially as fuel prices rise. As you weigh various investments in your business, you want to see how long it will take to get your initial costs back, and then how much it will save you over time.
If you run 110,000 miles per year, fuel is at $2.62 per gallon, and you are getting 6.3 miles per gallon, an improvement of just 0.3 miles per gallon will save $40 a week, $173 a month or about $2,078 a year. Something as simple as a flow-through muffler, which allows more air flow, could improve your fuel mileage by that amount and could cost less than $200 plus labor. Your ROI would be five weeks and your annual savings would be over $2,000.
It doesn’t get much better than that.
Next you might list the top five things you could do to improve fuel mileage, such as adding an auxiliary power unit or tires with lower rolling resistance, by calculating ROI on each.
Start with the strategy that has the shortest ROI. As you move to your next strategy, often you can use the savings from one investment to pay for the next. It takes discipline to implement and maintain this process, but when it comes time to convene your next business meeting, you’ll be encouraged by the results. n
If you don’t have a running average of your fuel mileage, starting a system to get it would be a good first goal. You need at least 30 days worth of fuel mileage numbers to get an accurate average. The longer you track it, the better.
Only with this number can you calculate how much you’ll save by investing in fuel-saving strategies. Here’s how:
• Keep a notebook and pen in your cab.
• Every time you fuel, make sure the truck is level.
• The first time you fuel, find a spot in the fuel tank at which you stop fueling, such as the bottom of the filler neck. Fuel to that spot every time you fill up.
• Write down your odometer miles at the fill-up and the number of gallons purchased. Do this every time you fill up.
• Divide number of gallons bought for fill-up by number of miles run since the prior fill-up to get miles per gallon.
You should also make notes in your records for each tank, such as weight of load, average speed, weather conditions, terrain, etc. As you relate these factors to mpg fluctuations, it will teach you how driving habits and conditions affect your mileage.
Odometer at second fill-up 435,376
Odometer at first fill-up – 434,532
Miles run 844 Gallons at second fill-up 140 MILES PER 844 / 140 GALLON = 6.029